Liechtenstein

**Report: Retail Cryptocurrency Trading Status in Liechtenstein**

**Topic:** Retail_Trading_Status
**Description:** Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

---

**1. Current Status:** `Allowed-Regulated`

**2. Narrative Explanation:**

Liechtenstein permits its citizens and residents to buy, sell, and hold cryptocurrencies. The jurisdiction is widely recognized as crypto-friendly, having established a comprehensive legal framework early on to provide legal certainty and foster innovation in the blockchain and digital asset space.

The cornerstone of Liechtenstein's approach is the **Token and TT Service Provider Act (TVTG)**, commonly known as the **Blockchain Act**, which came into force on January 1, 2020. This pioneering legislation does not prohibit individuals from owning or transacting with cryptocurrencies. Instead, it focuses on regulating the *service providers* operating within the "token economy." The TVTG defines tokens broadly and establishes rules for their creation, ownership, and transfer under civil law using a "Token Container Model" (TCM), providing clarity on aspects like possession and disposition rights linked to private keys.

Key aspects of the regulatory environment include:

*   **Regulation of Service Providers:** The TVTG mandates that entities providing professional services related to tokens and trustworthy technologies (TT) – such as exchanges (TT exchange service providers), custodians (TT key/token depositaries), token issuers, and physical validators – must register with the **Financial Market Authority (FMA) Liechtenstein**. This registration involves meeting specific requirements regarding technical suitability, internal controls, and potentially minimum capital.
*   **AML/KYC Requirements:** Liechtenstein applies robust Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) regulations to the crypto sector. The **Due Diligence Act (DDA)** and **Due Diligence Ordinance (DDO)** mandate that registered TT service providers implement comprehensive Know Your Customer (KYC) and AML procedures. This includes customer identification, verification, and transaction monitoring, aligning with international standards like those set by the Financial Action Task Force (FATF), including the "Travel Rule" for crypto transfers. This effectively means that individuals using regulated platforms will need to undergo KYC checks. While private, non-professional trading between individuals might occur, professional trading and services facilitated by registered entities operate under strict AML/KYC rules, generally precluding anonymous trading on regulated platforms.
*   **MiCA Implementation:** As a member of the European Economic Area (EEA), Liechtenstein is incorporating the EU's **Markets in Crypto-Assets (MiCA) Regulation** into its legal framework. The EEA MiCA Implementation Act entered into force in Liechtenstein on February 1, 2025, pre-implementing MiCA until its formal incorporation into the EEA Agreement. MiCA establishes harmonized rules for crypto-asset service providers (CASPs) across the EEA, covering activities like operating trading platforms, custody, exchange services, and advising on crypto-assets. This regulation will largely supersede parts of the TVTG related to service provider licensing, enabling passporting rights for licensed CASPs across the EEA. However, the civil law aspects established by the TVTG regarding token ownership and transfer will remain in force.
*   **Government Stance:** The Liechtenstein government and the FMA maintain a progressive and open approach towards crypto-assets and blockchain technology, aiming to create a supportive environment for innovation while ensuring financial stability, client protection, and the prevention of financial crime.

In summary, retail trading of cryptocurrencies is permitted in Liechtenstein. Individuals can legally own, buy, and sell crypto-assets. However, the ecosystem is regulated, primarily focusing on the licensing and supervision of service providers (exchanges, custodians, etc.) by the FMA and the enforcement of strict AML/KYC requirements on these platforms. The upcoming full implementation of MiCA will further align Liechtenstein's regulatory landscape with broader European standards.

**3. Supporting Excerpts/Summaries:**

*   **On Permissibility:** "Cryptocurrencies are not expressly prohibited under Liechtenstein law and it does not provide restrictions on owning and using cryptocurrencies for transactions. Also, exchange between fiat currencies and cryptocurrencies is permitted." (Source: Global Legal Insights, 2024-10-25)
*   **On the Blockchain Act (TVTG):** "The Blockchain Act (officially known as the Law on Tokens and Trusted Technology (“TT”) Service Providers, or “TVTG”) provides a comprehensive and technology-neutral approach to regulating the entire token economy. On the one hand, it regulates the rights and obligations of certain clearly defined service providers who perform activities on TT systems. They are subject to license and supervision by Liechtenstein's Financial Market Authority (“FMA”). On the other hand, the TVTG creates a new civil law for cryptoassets and a legal basis for the ownership, possession, and disposition rights over cryptoassets." (Source: Global Legal Insights, 2024-10-25)
*   **On FMA Supervision:** "The TVTG entrusts the FMA with the registration and event-driven or ad hoc supervision of TT service providers. TT service providers are certain service providers who provide their services on TT systems such as a blockchain." (Source: FMA Liechtenstein website)
*   **On AML/KYC:** "Liechtenstein law also provides for comprehensive and effective know-your-customer (“KYC”) and anti-money laundering (“AML”) regulations under the Due Diligence Act, which, in particular, also applies to offerings of transactions with cryptoassets." (Source: Global Legal Insights, 2024-10-25)
*   **On AML/KYC Application:** "All transactions, conducted by TT service providers, are subject to Due Diligence Act and Ordinance (Sorgfaltspflichtgesetz or SPG) which establishes KYC/AML procedures in accordance with the EU regulations. And given the all-encompassing nature of this concept, it is safe to say that all operations with cryptocurrencies in Liechtenstein are subject to KYC/AML regulations." (Source: Legal 500 Country Comparative Guides, referencing data up to 2024)
*   **On MiCA Implementation:** "Given that Liechtenstein is an EEA Member State, MiCA will also be applicable in Liechtenstein and will replace many provisions of the TVTG. In Liechtenstein, MiCA and the EEA MiCA Implementation Act are expected to be effective from 1 February 2025." (Source: Global Legal Insights, 2024-10-25) / "MiCAR will become directly applicable in Liechtenstein once the corresponding decision of the EEA Joint Committee to incorporate the regulation into the EEA Agreement enters into force. The necessary implementation into Liechtenstein law is carried out through the Law implementing Regulation (EU) 2023/1114 on Markets in Crypto-Assets (EEA MiCA Implementation Act, EWR-MiCA-DG), which entered into force on 1 February 2025." (Source: FMA Liechtenstein website)

**4. Source URLs:**

*   **Global Legal Insights - Blockchain & Cryptocurrency Laws 2025 | Liechtenstein:** https://www.globallegalinsights.com/practice-areas/blockchain-laws-and-regulations/liechtenstein (Provides comprehensive overview including TVTG, AML, MiCA)
*   **FMA Liechtenstein - TT Service Providers:** https://www.fma-li.li/en/supervision/supervision/tt-service-providers.html (Official FMA page on TVTG supervision)
*   **FMA Liechtenstein - MiCAR Regulation:** https://www.fma-li.li/en/regulation/regulation-eu-2023-1114-on-markets-in-crypto-assets-micar.html (Official FMA page on MiCA implementation)
*   **Legal 500 - Liechtenstein: Blockchain Country Comparative Guide:** https://www.legal500.com/guides/chapter/liechtenstein-blockchain/ (Analysis of the legal framework, including AML/KYC)
*   **Notabene - Liechtenstein Crypto Travel Rule:** https://notabene.id/crypto-travel-rule-liechtenstein (Details on AML/Travel Rule implementation)
*   **Crypto Regulation in Liechtenstein 2025 (Regulated United Europe):** https://rue.ee/en/news/crypto-regulation-in-liechtenstein (Summary of regulations and licensing)

---
*Disclaimer: This report is based on information available up to April 12, 2025. Regulatory landscapes can change rapidly; always consult official sources or legal counsel for the most current information.*